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He named MP John McVeigh as acting Minister for Infrastructure and Transport.

Mr Joyce said his decision was “confirmed by the allegations that I read in the paper”.

“I just thought that has to be the straw that breaks the camel’s back,” he said.

As well as announcing his intention to step down, he also commented on the “litany of allegations” against him.

“Might I say right here, any person in any political party always says, the leaking, the backgrounding, all that, it will destroy not only our government, it will destroy any government,” he said.

While he said he couldn’t comment at length about the latest allegation he said “I have asked that be referred to police”.

“I’ve asked for the right of the person who’s made the allegation and I’ve asked for my right of defence that be referred to the police,” he said.

Mr Joyce also used the press conference to address the issues surrounding his personal life.

“I apologise to Vikki, the idea, walking across the road as a pregnant lady and just being, you know, put under so much pressure. I mean, I thought that's not who we are in Australia,” he said making reference to his partner and former media advisor Vikki Campion’s photo being splashed on the front page of a national newspaper.

“That's not the kind of people we are. I'm the public figure, go after me. That's what I get paid for but don't go after private individuals. It's just wrong. And always think of it when you see something like that on paper and you think it's salacious, think, "What if that was me? My mother, my wife? How would I feel."

Mr Joyce’s political rivals have been quick to comment in the wake of his planned departure, with leaders for the Opposition and Greens declaring he should have resigned “when this matter first broke”.

“The fact that the scandal has dragged on for 16 days has been damaging to the government, but more importantly, the country,” Opposition leader Bill Shorten said.

“Mr Turnbull’s handling of this has shown an atrocious lack of judgement”.

Greens leader Richard Di Natale said: “This is something that should have happened more than a week ago.”

As well as expressing their disdain at Mr Joyce’s delayed resignation announcement, they both pounced on the alleged “secret agreement” between Mr Turnbull and the leader of the Nationals.

“It is a disgrace that a secret agreement that has hamstrung this Prime Minister through this saga has been kept secret rather than being in the public domain,” Mr Di Natale said.

“The secret agreement must be made public,” Mr Shorten said.

Mr Joyce’s decision to step down comes just days after two of his party colleagues publicly said they could no longer support him.

His car park press conference came at the end of a long day, which began with headlines that he was the subject of a sexual harassment complaint, which the Nationals executive confirmed it had received.

Federal party director Ben Hindmarsh said the complaint would be taken seriously and treated with strict confidentiality.

Mr Joyce has labelled the allegation as “spurious and defamatory”, adding that if there was any substance “they should have been referred to police”.

The embattled MP has been fighting to keep his grip on his leadership and Deputy Prime Ministership since his relationship with former media advisor Vikki Campion was exposed this month.

In the wake of the affair, and allegations Mr Joyce may have misused his ministerial powers for personal gain, Prime Minister Malcolm Turnbull called for his second in charge to "consider his position".

In a public address last week, Mr Turnbull said his deputy had made a "shocking error of judgment" by having a relationship with former media advisor Vikki Campion, and humiliated his wife and daughters.

Mr Turnbull rewrote the ministerial code of conduct to ban ministers from having sex with staff.

NSW Nationals MP David Gillespie has confirmed he will contest the vacant leadership after Barnaby Joyce officially quits.

Mr Joyce has announced he will resign at a party room meeting in Canberra on Monday morning, igniting the race to replace him as deputy prime minister.

Before Mr Joyce's announcement, Dr Gillespie said he was a safe pair of hands with ministerial experience and a record of delivering in his electorate.

The member for Lyne on the NSW mid-north coast was a gastroenterologist for 20 years before he entered parliament in 2013.

He was appointed assistant minister for rural health in 2016, before becoming assistant minister for health, and now assistant minister for children and families.

Another challenger, Michael McCormack, was editor of the Daily Advertiser in Wagga Wagga during the 1990s and entered parliament in 2010.

He has been touted as a potential leader but suffered through a difficult interview on Sky News this week in which he repeatedly refused to back his boss.

The veterans' affairs minister has not ruled out running for the leadership but was yet to state his intentions on Friday.